Transwestern Ventures Has $122M for Its Debut Investment Fund

Transwestern announced that its opportunistic investment arm, Transwestern Ventures, landed $122 million for its debut fund, Transwestern Ventures Partners I. The company said that its initial target was $100 million.

The funds came from ten sources, “made up primarily of family office and high-net-worth investors,” in amounts ranging from $5 million to $20 million.

“Leveraging Transwestern’s nearly 2,100 leasing, development, operations and investment professionals across 33 markets, TVP I will invest in strategic commercial real estate opportunities throughout the U.S. This includes partnering with Transwestern companies as well as other real estate developers and operators within commercial real estate growth sectors.”

The firm “might be serving as a partner for an adaptive reuse project, providing rescue capital for a sidelined deal, launching new development in a supply-constrained market, or a host of other opportunities. In all cases, the Transwestern platform can lend investment acumen and operational expertise.”

The company says that local market expertise will be a gating factor in investment strategies and decisions. Ultimately, any deal and operation must work within the context of its own market. The breadth of Transwestern’s operations leaves it, and invest investment arm, in a good position to source potential deals, including those that aren’t officially on the market. The focus will be on “Transwestern’s core competencies,” as the release quoted managing partner Fred Knapp. That would include industrial, multifamily, healthcare, life sciences, office, hotels, and land development.

The opportunistic slant of the investments could find welcome environs in the current CRE markets. One consideration might be distressed acquisitions. Many investments, particularly within the last several years, took advantage of low interest rates and available high-leverage loans. With the Federal Reserve driving up interest rates to slow growth, and possibly put the economy into recession, many deals could become marginal and force sales or seizure by lenders who would then want to recover capital.

Separately, supply-constrained conditions describe many areas in CRE, particularly multifamily in many markets and industrial still in some. Adaptive reuse may also become more popular, given that much of office and certain types of retail may be overbuilt, with other uses being attractive for not only investors but cities that want to recapture tax revenue.

Transwestern announced the launch of the new investment arm in March 2022. Before joining Transwestern, Knapp served as principal and head of acquisitions for EQT Exeter, a global investment manager, where he oversaw office and life science real estate investments nationally.

Vice president Hugh Stewart came from Lazard, a global financial advisory and asset management firm where he specialized in technology, media, and telecommunications investments.